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Scandal-palooza
May 14, 2008
Wednesday, May 14, 2008

Whoa, where has the time gone? Seems like just yesterday we were apologizing for being MIA and telling you that we promised to post much more often. Just goes to show you that promises from the Casino Journal aren't worth the hyperspace they're written on.

Well, no worries. We're back now. That's all that matters.

... Here's the latest on Pittsburgh's casino:

"Don Barden has asked the state gaming control board to postpone a public hearing scheduled today on the financing for the North Shore casino, saying he needs more to negotiate the terms with lenders. His company, PITG Gaming LLC, filed a motion with the board last evening seeking the postponement. The board was scheduled to hear testimony in Mercer County this afternoon. With the request, that likely will be postponed. 'We need a little more time to complete our negotiations with the lenders,' PITG Gaming spokesman Bob Oltmanns said this morning. Asked if Mr. Barden's $800 million in financing for the casino was in trouble, Mr. Oltmanns replied, 'I wouldn't say that. I'm not going to elaborate on the nature of the negotiations other than to say we need a little more time to wrap them up.'"

Well that's reassuring.

... North of Pittsburgh, in Lawrence County, a slight change in plans for the planned racetrack casino:

"Stephen Hilbert, the flamboyant former chief executive of Conseco Inc. and would-be part-owner of a racetrack casino in Lawrence County, is asking Pennsylvania's casino regulatory panel if he can withdraw his application for a casino license, a move that would minimize the need for state investigators to dig into his personal and financial history."

Long story short: Hilbert could still loan money to Centaur, but wouldn't obtain an ownership stake in the casino.

FYI, the state Gaming Control Board is in Lawrence County on Thursday, for an a.m. hearing about Valley View Downs, then its regularly scheduled action meeting in the p.m.

Here's what to expect out of the a.m. session.

De Scandal in De Poconos

Writes the Morning Call's John Micek: "Six state lawmakers called Tuesday for the state attorney general to investigate whether state gaming regulators broke the law when they, according to sources, ordered their investigators to change a background report on Mount Airy Casino Resort owner Louis DeNaples."

Where on earth would they have gotten a crazy idea like that?

Oh, right:

"State gaming regulators ordered their investigators to change a background report on Mount Airy Casino Resort owner Louis DeNaples -- and gave DeNaples early access to challenge its findings -- before awarding him a slots license, according to sources. The Pennsylvania Gaming Control Board's Bureau of Investigations and Enforcement revised its report on DeNaples at least six times, sources said, after board Executive Director Ann Neeb and General Counsel Frank Donaghue reviewed each draft and objected to BIE's findings as inconclusive, unsubstantiated or hearsay ... The process used in Pennsylvania is alien to experienced gaming jurisdictions such as New Jersey and Nevada, where investigators conduct background checks of license applicants independently. There, only after gaming investigators complete their work, are background reports delivered to decision-makers. Also, in those states, decision-makers expect to hear all allegations -- proven or not -- about an applicant prior to voting."

Fine, but if Nevada and New Jersey jumped off a bridge, would you?

... "Slots wagers rose slightly across the state last week, while Mount Airy reported a small drop in betting. But gamblers walked away with more loot, as the Paradise Township casino increased its payout to winning bidders [to] compete with Atlantic City, New Jersey casinos. Mount Airy's payout rate has been the highest in the state since they opened."

... Just in case you haven't had your fill of casino-related scandals, here's another -- the Mohegan Sun casino chain, which operates the casino at Pocono Downs racetrack, has been tangentially linked to a "corrupt" Wisconsin developer:

"Mohegan Sun at Pocono Downs is owned by Downs Racing, which in turn is owned by the Connecticut-based Mohegan Tribal Indians. They ran into trouble while trying to expand their gaming operations into Wisconsin. Wisconsin licensing officials discovered Mohegan's developer was being investigated in connection with a scheme to secure the approval of Wisconsin's governor for an $800 million casino. The developer, Dennis Troha, was indicted for illegal campaign contributions in March 2007, and pleaded guilty to money laundering charges in June of that year. The developer's guilty plea came after Mohegan Sun's Pennsylvania category 1 slots license was approved. But an investigation by Wisconsin authorities revealed wrongdoings and mob ties going back long before the partnership began in 2002."

Yeeesh. Though if only two of 14 casinos in the state end up having mob tied and / or indicted owners, that's still a pretty good percentage, right? Not even Ted Williams bats 1.000.

... Brad Bumsted says the whole thing is one big heist:

"Imagine that a multibillion-dollar robbery has occurred and the thieves are long gone -- the heist of the century. Authorities are talking about how to prevent a recurrence. That's somewhat akin to casino gambling in Pennsylvania. The Legislature gave the casino licenses away for $50 million each. They'll rake in billions for the owners. The license could have been auctioned to the highest bidders."

Table games

The House Gaming Oversight Committee plans to meet Thursday morning to rap about H. William DeWeese's plan to allow table games in Pennsylvania.

Dispatches from the north (and from the border)

"With a new synthetic track, fat purses for horse races and 13 miles of lakefront beaches a two-hour drive from millions, the summer is looking 'really, really good' for Pennsylvania's Presque Isle Downs Casino, its owner says. Drivers weary of high fuel prices and looking for one-stop entertainment destinations also will likely consider MTR Gaming Group Inc.'s other key property, Mountaineer Casino, Racetrack Resort in Chester, W. Va., says President and CEO Ted Arneault. [Revenues for the first quarter] surged 26 percent, from $92 million to $116.3 million. Earnings before interest taxes, depreciation and amortization were up 24 percent, from $13.1 million to $16.2 million."

It always seems to come back to gas prices, doesn't it?

Odds and ends

A bad hand for gambling in the United States ... The Greektown casino is Detroit is already falling upon hard times, and the state may try to force the casino's current owners to sell ... Hoosier Park in Indiana is getting ready to open ... Will Harrah's be allowed to put a mega-casino in the middle of, say, Dublin's Temple Bar? ... The never-ending quest to bring casinos to Ohio continues ... Maryland business are supporting the state's push for legalized slot machines.

First published on May 14, 2008 at 1:13 pm
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